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Management
Fundamentals of Process Management
Rev 00.0 (Jun 03)
Kiran Deshmukh
Sona Koyo Steering Systems Ltd.
TQM Means
Think much of
Factors and
Processes
Customer
Society
Next Process
TQM
scientific & quality
oriented management for
customer satisfaction by
participation of all
members in the company
Retention
Improvement
Based on Facts
Humanized
Operations
Customer
Focus
Unique
Organizational
Capability
Continuous
Improvement
Total
Participation
Societal Networking
Improvement As a Process
Management by Process
Develop plan
for measuring
whether
implementation
plan is being
followed
D
Execute
Implementation and
Measurement plans
Monitor results
and adherence to
implementation plan
OUTPUT
Set new or
revised goal
Develop
implementation
plan for
accomplishing
the goal
Choose specific
improvement
activity
Sense
problem
Plan
solution
Standardize
solution
Level of
thought
data
Level of
experienc
e
data
data
Process Control
An effective standard process
exists to perform some business or
manufacturing function.
The process is being monitored to
make sure it is working as
intended.
If the process gets out of control,
one takes corrective action as
predetermined as described in the
maintenance manual.
This is the SDCA (have standards,
do, check and act) cycle.
Check / evaluate
effects (C)
Level of
thought
Do / use
standard (D)
data
Level of
experienc
e
Control
Reactive Improvement
When the process control is weak,
the process results go out of
control often.
Even if one takes corrective
actions according to the SDCA
cycle, still the process goes out of
control.
One has to collect data, analyze it,
find the root cause of the problem,
and implement appropriate
countermeasures.
The specific problem is solved
through the 7 steps of problem
solving.
1. Select
theme
6. Standardize
solution
4. Plan
and
2. Collect
3. Analyze
and analyze
causes
data
Implement
solution
5. Evaluate
effects
Level of
thought
data
Level of
experienc
e
data
Reactive
Proactive Improvement
Sense
problem
Explore
situation
1. Select
theme
Formulate
problem
6. Standardize
solution
4. Plan
and
2. Collect
3. Analyze
and analyze
causes
data
Implement
solution
5. Evaluate
effects
Level of
thought
data
Level of
experienc
e
data
Proactive
data
Sense
problem
Explore
situation
1. Select
theme
Formulate
problem
6. Standardize
solution
4. Plan
and
2. Collect
3. Analyze
and analyze
causes
data
Implement
solution
5. Evaluate
effects
Level of
thought
Level of
experienc
e
Control
Reactive
Proactive
Iterative Improvement
7. Reflect on process
and next problem
Sense
problem
Explore
situation
1. Select
theme
Formulate
problem
2. Collect
and analyze
data
6. Standardize
solution
4. Plan
and
3. Analyze
causes
Implement
solution
5. Evaluate
effects
Level
of
though
t
Control
Level of
experienc
e
Reactive
Proactive
Higher Quality
Plan
Do
Act
Check
Plan
Do
Check
Act
Plan
Do
Act
Check
Rotation 2
P
Plan
Do
Act
Check
Plan
Do
Rotation 1
P
Plan
Do
Act
Check
Act
Check
Normal Problem
Standard Work
Process
Plan
Do
Act
Check
Type of
problem
Breakthrough
Improvement
SDCA
Profound Problem
PDCA2
Plan
Do
Act
Check
PDCA1
Mechanical Properties
Temperature
Size growth
Carbon potential
Bend
Time
Others
Quench agitation
Inputs
HEAT TREATMENT
PROCESS
(Carburizing
Furnace)
Output
(Heat Treated Parts)
Others
Metallurgical
Properties
Furnace Consistency
Case depth
Surface hardness
Core hardness
Microstructure
Mechanical Properties
Feedback
Temperature
Size growth
Carbon potential
Bend
Time
Others
Quench agitation
Inputs
HEAT TREATMENT
PROCESS
(Carburizing
Furnace)
Output
(Heat Treated Parts)
Others
Metallurgical
Properties
Furnace Consistency
Case depth
Feedback
Surface hardness
Core hardness
Microstructure
Requirements
Supplier
Inputs
Feedback
PROCESS
Participants
Value-added tasks
Requirements
Output
Customer
Feedback
PROCESS DISCOVERY
Understand the customer
and the process
PROCESS CONTROL
Assessing conformance to
customer requirements
REACTIVE
IMPROVEMENT
The 7 Steps method
Process Management I
Process Discovery:
What are my products / services?
Who owns the process?
PROCESS DISCOVERY
Understand the customer
and the process
Process Management II
PROCESS CONTROL
Process Control:
Assessing conformance to
customer requirements
Reactive Improvement:
What activities are needed to improve my process?
Identify largest source of variation in standard process.
Find and eliminate root cause of variation.
Define new standard process.
REACTIVE
IMPROVEMENT
The 7 Steps method
1. Our Customers
3. Customers Requirements
People think that they know the best what the customer
wants.
Without asking the customer about customers requirements, one
cannot be sure the products and services one is providing are the
right ones.
5. Our Process
6. Our Requirements
An
Products /
Services
Requirements
Metrics /
Targets
s
ow
l
l
o
F
nt
e
tm
r
pa
e
D
l
l
ro
y
Pa
f
o
e
l
mp
a
Ex
Meet /
Exceed?
Products / Services
Pay in hand or at bank
Employee tax forms
Distributions to insurance, etc.
Changes in distribution amounts
Pay slip with summary information
Answers to employee questions
Answers to others to help employees
Pay advance in emergencies
Cost
Local currency
Delivery
On time
To right address
To special location
Cost
Local currency
Accurate
distributions
Delivery
On time
To right address
To special location
Process Control
Check / evaluate
effects (C)
Level of
thought
Do / use
standard (D)
data
Level of
experienc
e
Control
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K)
PR ($K)
Leads ('00) 15
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
14
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
13
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
14
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
15
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
16
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
13
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
14
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
13
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20
4
13 14.5
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20 20
4
4
13 14.5 16
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20 20 20
4
4
6
13 14.5 16
13
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20 20 20
4
4
6
13 14.5 16
20
2
13
14
Target =
1700
Leads ('00)
16
15
14
13
12
11
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Adds ($K) 20
0
PR ($K)
Leads ('00) 15
22
0
14
24
0
13
24
0
14
24
0
15
26
0
16
20
2
13
20
4
14
20 20 20
4
4
6
13 14.5 16
20
2
13
20
0
14
13
Target =
1700
Leads ('00)
16
15
14
ng
i
ry g
a
v in ke
12
y
e
r,
ar var ma ve
11
ts re to we nd
l
su e a ng Ho sta ns
e
r w yi r. er io r!
10
eMaydJunat Jule Aug Sep Oct
trApr
dMar
t
Janhe
Feb
t
n
s
T a
t be t un ari oth
u
v 26h 20 20 20 20
o 24
Adds ($K) 20 22np 24s 24
e
n
i ng o
s ac
e
i
0
0
0
0
0 e 0
2
4
4
4
PR ($K)
th e d th to
Leads ('00) 15 14 w13 ow14te 15 16 13 14 13 14.5
h la
re
13
20
2
13
20
0
14
20
0
13 12.5
Customer desired
specifications
Upper
Specification
Limit (USL)
Men
Materials
Methods
PROCESS
OUTPUT
12
10
8
F
re
q
u
e
n
c
y
,%
6
4
Upper Natural
Limit = 1513
Lower Natural
Limit = 942
6
5
4
3
Rs. lac
(August 1, 02 ~ September 30,
02)
Rs. lac
Central tendency: 1228
Natural variability: 942 ~ 1513
1
5
8
0
1
5
4
0
1
5
0
0
1
4
6
0
1
4
2
0
1
3
8
0
1
3
4
0
1
3
0
0
1
2
6
0
1
2
2
0
1
1
8
0
1
1
4
0
1
1
0
0
1
0
6
0
1
0
2
0
9
8
0
9
4
0
9
0
0
8
6
0
0
8
2
0
1
4
5
1
~
1
5
0
0
1
4
0
1
~
1
4
5
0
1
3
5
1
~
1
4
0
0
1
3
0
1~
1
3
5
0
1
2
5
1
~
1
3
0
0
1
2
0
1
~
1
2
5
0
1
1
5
1~
1
2
0
0
1
1
0
1
~
1
1
5
0
1
0
5
1
~
1
1
0
0
1
1
0
0
1
~
1
0
5
0
F
re
q
u
e
n
c
y
Mean = 1228
Customer desired
specifications
Lower Natural
Process Limit
(LNPL)
Upper
Specification
Limit (USL)
Upper Natural
Process Limit
(UNPL)
Customer desired
specifications
Customer desired
specifications
Actual process
performance
Actual
process
performanc
e
Routine Variation
Exceptional Variation
Mean
UNPL
LNPL
Stable Variation
Mean
UNPL
LNPL
Voice of Customer
PROCESS
Men
Materials
Methods
OUTPUT
Voice of Process
Do
improvement
Plan
improvement
Check work
against
standard
D
P
C
A
Check
improvement
results
Improvemen
t activities
Act: either
standardize, or
re-plan
Use standard
Do work
Routine
work
Leads ('00)
20
18
16
ble
a
t
s
in a make
g
n
i
we
hav
e
s
b
e
er
g
n
h
n
t
e
a
o
e
. In
a s b f t h e ch
at
R
h
h
P
s
t
s
d
o
y
e
all
roc
g an in a wa
ut
e
p
n
t
i
o
i
s
e
b
p
i
t
a
s
e
r
Th
abl
han
n de of adve
t
t
o
s
i
e
ish
s
h
r
u
a
o
g
x
w
fas
i
m
n
da
ess
em
ing
c
n
h
c
t
o
a
u
r
s
d
n
p
i
he
pro r effort
t
f
,
o
d
wor capable d all ou ted.
in
as
an
w
,
s
e
d
r
was
we
lea
Target
UNPL =
0
0
7
1
1751
Mean =
1400
14
12
LNPL = 1049
10
Jan
Feb Mar
Jul
Aug Sep
Adds ($K)
20
22
24
24
24
26
20
20
20
20
20
20
20
20
PR ($K)
Leads ('00)
15
14
13
14
15
16
13
14
13
14.5
16
13
14
13
12.5
Leads ('00)
20
18
th e
f
o
a
May
y
d
b
n
a
s
pril R effort were
A
,
h
d P results
arc
e
M
s
ed
f
a
t
o
e
c
r
e
e
d
c
m
p
ex
e en r, we in last so
e
h
s
t
we
o
t
a
h
t
t
A
t
e
a
a
y
h
d
nd
nd
on
gt
seco of four, a ere bey ndicatin
r
,i
tw
e.
facto ced tha ariation ifferenc
v
u
d
prod routine made a
had
from
Target
UNPL =
1751
16
Mean =
1400
14
12
LNPL = 1049
10
Jan
Feb Mar
Jul
Aug Sep
Adds ($K)
20
22
24
24
24
26
20
20
20
20
20
20
20
20
PR ($K)
15
15
15
Leads ('00)
15
14
13
14
15
16
13
14
13
14.5
16
13
14
13
12.5
20
22
24
15
Effect of Prevention
Customer
Complaint
Customer
Complaint
In-house
Rejection
In-house
Rejection
Fix
position
by
preventio
n
Improvement
PREVENTION: Improvement in standards / procedures, installation of
pokayokes
Function of Management
Normal Problem
Standard Work
Process
Plan
Do
Act
Check
Type of
problem
Breakthrough
Improvement
SDCA
Profound Problem
PDCA2
Plan
Do
Act
Check
PDCA1
Division of Work
Executive
Breakthrough
(PDCA2)
Division Head
Deptt. Head
Supervisor
Operator
Improvement
(PDCA1)
Retainment
(SDCA)
30
Authority:
Decide specifications of production equipment,
methods of preventive maintenance, etc.
Responsibility:
Build up production method, provide capacity of
production, implement preventive maintenance, etc.
Accountability:
Method availability for production, cost of maintenance,
quality of products, etc.
CEO
Middle
Manager
Common
People
Authority
Responsibility
Accountability
Process
Result
Checking point
Managing Points
Checking Point
Production cost
Division Head:
Dept. Manager:
CEO:
Managing Point -
70
Power of Alignment
People
and jobs
Key
company
goals
=
People and tasks realign
quickly to the changed
company goals due to
environmental change
Environmental change
An Example of MfO
Statement of desired
outcome for next year
100 percent
Deadline date
March 2003
Components of MfO
Long-term
vision and
plan
Environmental
changes
Diagnosis by
president
Companys
mid-term
plan
PLA
N
Policy and
measuremen
t plan
deployment
Annual
policy
Act
Check
DO
Control by
measuremen
t
Level of customer
satisfaction
Improvement
required
Difference
Forecast
improvement
from daily
management
Present
Target date
Deployment of
solution
Improvement
of current
job or task
New job
or task
Analyze to achieve
required
improvement
Solution
Presidents MfO
Engineering
Reduce costs by
decreasing
length of
business cycles;
percent
decrease: 20%
Sales
Marketing
Administration
Why are
cycle
times
long?
Unresponsive
procurement and
inventory system
Engineering
Sales
Qualified prospects
unexpectedly decline
to purchase at last
minute
Marketing
Presidents MfO
Reduce costs by
decreasing
length of
business cycles;
percent
decrease: 20%
What prevents
achievement of
presidents
MfO?
Unnecessary approval
Administration loops
Production
Unresponsive
procurement and
inventory system
Engineering
Sales
Qualified prospects
unexpectedly decline to
purchase at last minute
Marketing
Administration
Unnecessary approval
loops
Sales MfO
Decease
average
sales cycle
by
decreasing
qualified
prospects
who dont
buy; percent
decrease:
30%
solution
Use PDPC to
anticipate
objections and
provide
countermeasure
s
Hold users
hand during
product trials
Presidents MfO
Prodn
Engg
Reduce costs by
decreasing
length of
business cycles;
percent
decrease: 20%
Sales
Use PDPC to
anticipate
objections and
provide
countermeasures
Sales
Support:
Admin
Hold users
hand during
product trials
Changes to
long-term or
mid-term plan
PLA
N
Policy and
measuremen
t plan
deployment
Annual
policy
Act
Check
DO
Control by
measuremen
t
Results
Plan / goal
Reality
Differenc
e
Time
2.
3.
4.
Actual
Performance & Judgment
Limits
( , , )
(D)
Summary of
Analysis of
Deviations
(C)
Implications
for Future
(A)
MfO Conclusions
The top-level MfOs are deployed downward through the
organization using a common language of effective
change:
Facts: using measurable data.
Process: using Ishikawa diagrams to understand whats really
happening.
Focus: using Pareto diagrams to be sure to address the vital few.
Discussions